A growing number of business executives have been keen to sign up to the UN's latest pet project: the so-called Sustainable Development Goals.This content was published on September 22, 2017 - 12:50
Until recently, if you'd asked most business leaders whether they would like to participate in the annual United Nations General Assembly in New York, the answer would have been: "Ugh!" It is bad enough that the gathering leaves the Big Apple in gridlock and that the meetings are notoriously bureaucratic and slow.
But what has been doubly irritating to many business leaders is that dealing with the organisation poses a profound culture clash, with development projects often bogged down by endless lists of pious platitudes and confusing acronyms.
This year, however, something striking has occurred: a growing number of business executives have been keen to sign up to the UN's latest pet project – the so-called Sustainable Development Goals (17 specific targets covering a range of issues from climate change and inequality to education and gender rights, which are supposed to be implemented by 2030).
This mingling of the tribes partly reflects a happy collision of interests. In the past few years, UN officials have realised that they may have a better chance of achieving the SDGs if business is involved. More precisely, they know that previous projects, such as the Millennium Development Goals, faltered partly because they were imposed from the top down, without much business (or local) support.
There is also the matter of money. These days, non-governmental groups – along with multinational bodies such as the UN – are finding it harder to get funding from cash-strapped western governments. On top of this, the arrival of Donald Trump threatens to slash US overseas aid by more than one-third. So NGOs are having to become ever more creative about how they tap into private sector money, using devices such as social impact funds.
Unsurprisingly, the UN is following suit with its SDGs. "We need money," Doris Leuthard, president of the Swiss Confederation, told the UN this week. Arif Naqvi, head of Abraaj investment group, thinks it will take "$2 trillion - $3 trillion [CHF1.9-2.9 trillion] of finance to implement the SDGs" – and predicts much of this will come from private sector funds, via new forms of investment projects.
But business is also pushing this new fusing of interests. As numerous executives observed in panels this week, many company leaders now find themselves under pressure from their own employees – and shareholders – to be "sustainable". There is more investment money flowing into socially aware funds as well.
As this internal pressure quietly builds, CEOs are starting to frame the SDGs as a business opportunity. Scott Mather, chief investment officer of Pimco, told a UN forum this week that his company was getting involved in the SDGs – and expects to see an explosion of SDG bond issuance in the coming months, which he hopes to tap into. Meanwhile, Frans van Houten, head of Royal Philips, says he sees the SDGs as a way to expand the Dutch company's brand around the world. "We all see commercial opportunities," says Bob Collymore, head of Safaricom.
But there is also a fascinating cultural issue at work here, and one that is rarely discussed: the creation of linguistic "bridges". Until recently, the way that NGOs or UN officials talked about development seemed distinctly alien – if not downright hostile – to many business executives. What SDGs have done is create common reference points, for all sides. Simply changing the linguistic framework has helped to bridge the tribal divide. The list of 17 targets – such as "End poverty", "Take urgent action to combat climate change" or "Reduce inequality" – gives businesses a scorecard. And while 17 is a lot, most businesses are picking two or three goals to focus on - and then telling NGOs or UN officials which ones they want to emphasise.
"The SDGs have given us common ground," says Collymore. "The SDGs give us the same language," echoes Amy Jadesimi, head of LADOL, a Nigerian oil logistics group. Or as Walter Macnee, vice-chairman of MasterCard, told a UN panel: "It's really important that the public and private sector can talk to each other. But to do that we need trust and a language we can all understand."
Nobody should pretend that this common language is going to deliver a development miracle; there are still lots of reasons to feel cynical about how the UN operates, and the degree to which corporates will ever really care about more than the bottom line.
And some CEOs think that the SDG metrics could be greatly improved. Sunil Mittal of Bharti Enterprises, for example, wants the International Chamber of Commerce to create standardised definitions of what "sustainable development" really means to prevent companies abusing the branding. "There is a free-rider issue with lots of money floating around and loose goals," Ulf Mark Schneider, Nestle CEO, told the UN. "We need common metrics and standards."
But the fact that business leaders care enough to start talking about C-suite-style "metrics" inside the UN is striking in itself; a couple of decades ago, this would have been hard to imagine. If nothing else, this suggests that the world is shifting – if only a notch. Let us hope it lasts, and even delivers some results.
Copyright The Financial Times Limited 2017
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